As bipartisan policymaker criticism of share buybacks, pushback against limitations on company share repurchase programs is likewise emerging with the Council of Institutional Investors recently joining the growing chorus of commentators warning against legislative action or at least proceeding with considerable caution.
As the Center has reported, over the last two weeks, influential In the immediate aftermath of the announcement of both bills, there were serious questions as to specifics of how the objectives of each buyback curb effort would be executed. Those questions persist as neither bill text had been revealed as of today.and Senators have announced their intent to introduce legislation to limit the ability of companies to execute share buybacks.
Despite the lack of specifics, a growing number of commentators have spoken out against efforts to limit share buybacks. The Council of Institutional Investors “[t]ying companies’ hands on capital allocation” while also noting that there is “no indication that companies that repurchase their own shares fail to invest in research, development, human capital, or equipment.” Other have also criticized the effort as well as . Few issues have united both the business community and investor groups. The seeming united front will be a further challenge to any legislative efforts to accomplish any real changes to buybacks – if that is the ultimate goal.